Sharekhan recommended hold rating on Kewal Kiran Clothing with a target price of Rs 1155 in its research report dated October 23, 2019.
Sharekhan's research report on Kewal Kiran Clothing
Revenue grew 9.5% y-o-y, as volumes and realisations grew by ~4% each; flagship brand Killer saw revenues surge, while Lawman is yet to recover. Higher cost of goods sold, discounts and trade margins hit gross margins, which along with a rise in S&A expenses caused OPM to plummet; PAT wasn’t affected much by shift to Ind-AS 116. Management guided for high single-digit revenue growth and OPM of above 20% in FY2020; lower corporate tax rate to help earnings grow in double digits.
We maintain our Hold rating with an unchanged price target (PT) of Rs. 1,155.
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